podman run: kernel does not support overlay fs

I try to create the my-byok-image by running:

$ podman run -it  --device=/dev/fuse   -v $XDG_RUNTIME_DIR/containers/auth.json:/run/user/0/containers/auth.json:Z   -v $MYDIR/my-knowledge:/markdown:Z   -v $MYDIR/output:/output:Z   registry.redhat.io/openshift-lightspeed-tech-preview/lightspeed-rag-tool-rhel9:latest
Error: kernel does not support overlay fs: unable to create kernel-style whiteout: permission denied
WARN[0000] failed to shutdown storage: "kernel does not support overlay fs: unable to create kernel-style whiteout: permission denied"

Test for the filesystem works fine

# check /markdown
$ podman run -it --rm --device=/dev/fuse \
  -v $XDG_RUNTIME_DIR/containers/auth.json:/run/user/0/containers/auth.json:Z \
  -v $MYDIR/my-knowledge:/markdown:Z \
  -v $MYDIR/output:/output:Z \
  registry.redhat.io/openshift-lightspeed-tech-preview/lightspeed-rag-tool-rhel9:latest ls -l /markdown
total 4
-rw-r--r--. 1 root root 1798 Aug 14 16:16 general.md

# create file /output/test
$ podman run -it --rm --device=/dev/fuse   -v $XDG_RUNTIME_DIR/containers/auth.json:/run/user/0/containers/auth.json:Z   -v $MYDIR/my-knowledge:/markdown:Z   -v $MYDIR/output:/output:Z   registry.redhat.io/openshift-lightspeed-tech-preview/lightspeed-rag-tool-rhel9:latest touch /output/test

# check /output/test
$ podman run -it --rm --device=/dev/fuse   -v $XDG_RUNTIME_DIR/containers/auth.json:/run/user/0/containers/auth.json:Z   -v $MYDIR/my-knowledge:/markdown:Z   -v $MYDIR/output:/output:Z   registry.redhat.io/openshift-lightspeed-tech-preview/lightspeed-rag-tool-rhel9:latest ls -l /output
total 0
-rw-r--r--. 1 root root 0 Aug 17 10:51 test

Start by reproducing the shown podman run command with /dev/fuse and the mounted /markdown and /output paths, then investigate the kernel overlay filesystem permission error. Done means the lightspeed-rag-tool-rhel9:latest image starts successfully and the documented filesystem checks still work.